2020 BAR REVIEW LABOR LAW

FUNDAMENTAL PRINCIPLES AND Handout No. 50

RECRUITMENT & PLACEMENT

FUNDAMENTAL PRINCIPLES

The relations between capital and labor are not merely contractual, impressed as they are with
so much public interest that the same should yield to the common good.

Parenthetically, the Civil Code provisions on the contract of labor state that the relations between
the parties, that is, of capital and labor, are not merely contractual, impressed as they are with
so much public interest that the same should yield to the common good. It goes on to intone that
neither capital nor labor should visit acts of oppression against the other, nor impair the interest
or convenience of the public. In the final reckoning, the danger of just such a policy against
marriage followed by petitioner PT&T is that it strikes at the very essence, ideals and purpose of
marriage as an inviolable social institution and, ultimately, of the family as the foundation of the
nation. That it must be effectively interdicted here in all its indirect, disguised or dissembled
forms as discriminatory conduct derogatory of the laws of the land is not only in order but
imperatively required. Philippine Telegraph and Telephone Company vs. National Labor
Relations Commission and Grace De Guzman, G.R. No. 118978, May 23, 1997

Under Article 4 of the Labor Code, “all doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations (IRR), shall be resolved
in favor of labor.”

In Peñaflor v. Outdoor Clothing Manufacturing Corporation, 618 SCRA 208 (2010), the Court
reiterated that the principle laid down in the law has been extended by jurisprudence to cover
doubts in the evidence presented by the employer and the employee. As discussed earlier, the
Union has raised serious doubt on the evidence relied on by the NLRC. Consistent with Article 4
of the Labor Code, we resolve the doubt in the Union’s favor. PMI-Faculty and Employees Union
vs. PMI Colleges Bohol, G.R. No. 211526, June 29, 2016

As a measure of social justice, the award of separation pay/financial assistance has been
upheld in some cases even if there is no finding of illegal dismissal

In this case, there was no sufficient proof that respondents were actually laid off from work. Thus,
the CA had no basis in ruling that respondents’ employment was illegally terminated since the
fact of dismissal was not adequately supported by substantial evidence. There being no dismissal,
the status quo between respondents and Expedition should be maintained. However, it cannot
be denied that their relationship has already been ruptured in that respondents are no longer
willing to be reinstated anymore. Under the circumstances, the Court finds that the grant of

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separation pay as a form of financial assistance is deemed equitable. As a measure of social

justice, the award of separation pay/financial assistance has been upheld in some cases even if
there is no finding of illegal dismissal. Expedition Construction Corporation, et al. vs. Alexander
M. Africa, et al., G.R. No. 228671, December 14, 2017

In a number of cases, the Supreme Court (SC), has granted financial assistance to separated
employees for humanitarian considerations, as a measure of social and compassionate justice
and as an equitable concession.

Taking into consideration the factual circumstances obtaining in the present case, and the fact
that Ernesto, in his own little way, has devoted his efforts to further petitioner’s endeavors, the
Court finds that Ernesto, who is now substituted by his heirs, is entitled to this kind of assistance
in the amount of P75,000.00. Loadstar International Shipping, Inc. vs. Ernesto Awiten Yamson,
et al., G.R. No. 228470, April 23, 2018

Rule XIV of the Omnibus Rules Implementing the Labor Code is explicit in that the period of
preventive suspension should not exceed thirty (30) days, after which, the employee must be
reinstated and paid the wages and other benefits due.

SECTION 4. Period of suspension. — No preventive suspension shall last longer than 30 days. The
employer shall thereafter reinstate the worker in his former or in a substantially equivalent
position or the employer may extend the period of suspension provided that during the period
of extension, he pays the wages and other benefits due to the worker. In such case, the worker
shall not be bound to reimburse the amount paid to him during the extension if the employer
decides, after completion of the hearing, to dismiss the worker. Consolidated Building
Maintenance, Inc. vs. Rolando Asprec, G.R. No. 217301, June 6, 2018

When a “lay-off” is permanent, it amounts to dismissal. However, when the same is temporary,
it is regarded as a mere suspension of the employment status of the employee.

Notably, while the Court recognizes lay-off as an exercise of management prerogative,

jurisprudence requires that the same must be attended by good faith and that notice must be
given to the employees concerned and the DOLE at least one (1) month prior to the intended
date of lay-off or retrenchment. Article 286 of the Labor Code, as cited by CBMI, likewise
contemplates lay-off, particularly that which is temporary in nature, and as such must be for a

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period not exceeding six months. In which case, apart from causes attributable to the employer,
the temporary suspension of employment may also be on account of the employee’s
performance of military or civic duty. Consolidated Building Maintenance, Inc. vs. Rolando
Asprec, G.R. No. 217301, June 6, 2018

It is well-settled that employers have the prerogative to impose standards on the work quantity
and quality of their employees and provide measures to ensure compliance therewith.

Noncompliance with work standards may thus be a valid cause for dismissing an employee.
Nonetheless, to ensure that employers will not abuse their prerogatives, the same is tempered
by security of tenure whereby the employees are guaranteed substantive and procedural due
process before they are dismissed from work. Rutcher T. Dagasdas vs. Grand Placement and
General Services Corporation, G.R. No. 205727, January 18, 2017

The Constitutional guarantee of security of tenure extends to Filipino overseas contract

workers.

The Constitutional guarantee of security of tenure extends to Filipino overseas contract workers
as the Court declared in Sameer Overseas Placement Agency, Inc. v. Cabiles, 732 SCRA 22 (2014):
Security of tenure for labor is guaranteed by our Constitution. 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. Princess Talent
Center Production, Inc. vs. Desiree T. Masagca, G.R. No. 191310, April 11, 2018

Since the employment contracts of Overseas Filipino Workers (OFWs) are perfected in the
Philippines, and following the principle of lex loci contractus (the law of the place where the
contract is made), these contracts are governed by our laws, primarily the Labor Code of the
Philippines and its implementing rules and regulations (IRR); Thus, even if a Filipino is employed
abroad, he or she is entitled to security of tenure, among other constitutional rights.

Security of tenure remains even if employees, particularly the Overseas Filipino Workers (OFWs),
work in a different jurisdiction. Since the employment contracts of OFWs are perfected in the
Philippines, and following the principle of lex loci contractus (the law of the place where the
contract is made), these contracts are governed by our laws, primarily the Labor Code of the
Philippines and its implementing rules and regulations. At the same time, our laws generally apply

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even to employment contracts of OFWs as our Constitution explicitly provides that the State shall
afford full protection to labor, whether local or overseas. Thus, even if a Filipino is employed
abroad, he or she is entitled to security of tenure, among other constitutional rights. Princess
Talent Center Production, Inc. vs. Desiree T. Masagca, G.R. No. 191310, April 11, 2018

RECRUITMENT AND PLACEMENT

Recruitment and Placement, defined

Article 13(b) of the Labor Code defines recruitment and placement as “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.”

One (1) of the roles of the Philippine Overseas Employment Administration (POEA) is the
regulation and adjudication of private sector participation in the recruitment and placement of
overseas workers.

Article 25 of the Labor Code, as amended, reads:

ART. 25. Private Sector Participation in the Recruitment and Placement of Workers.—Pursuant
to national development objectives and in order to harness and maximize the use of private
sector resources and initiative in the development and implementation of a comprehensive
employment program, the private employment sector shall participate in the recruitment and
placement of workers, locally and overseas, under such guidelines, rules and regulations as may
be issued by the Secretary of Labor. (Emphasis supplied)

This is echoed in Article 35 of the Labor Code, as amended, and Section 23(b.1), R.A. No. 8042 as
amended by R.A. No. 9422, where the legislature empowered the DOLE and POEA to regulate
private sector participation in the recruitment and overseas placement of workers, to wit:

ART. 35. Suspension and/or Cancellation of License Authority.—The Secretary 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 Secretary 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 Instruction. Republic
vs. Humanlink Manpower Consultants, Inc., G.R. No. 205188, April 22, 2015.

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Upon the cancellation of a license, persons, officers and directors of the concerned corporations
are automatically prohibited from engaging in recruiting and placement of land-based
overseas Filipino workers (OFWs).

The grant of a license is a privilege and not a right thus making it a proper subject of its regulatory
powers. If [we] are to protect the welfare of vulnerable overseas workers, then [we] must prevent
all instances wherein they may be taken advantage upon. This must be so since the rules must
be read as a whole to achieve its particular purpose. Particular words, clauses and phrases should
not be studied as detached and isolated expressions but as a whole and every part of the statute
must be considered in fixing the meaning of any of its parts and in order to produce a harmonious
whole. It is inconsequential therefore whether or not the POEA or the DOLE stated then in their
decision that persons, officers and directors are disqualified from participating in the
government’s overseas employment program. The law and rules implementing the same
unequivocally state that once a recruitment license of an entity is cancelled, its officers and
directors are automatically prohibited from engaging in such activity. The failure of the POEA and
DOLE to indicate this fact cannot by any means indicate the contrary. Dura lex sed lex. Republic
vs. Humanlink Manpower Consultants, Inc., G.R. No. 205188, April 22, 2015.

Illegal Recruitment, defined

The crime of illegal recruitment is defined and penalized under Sections 6 and 7 of Republic Act
(R.A.) No. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995, 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 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… 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. People vs. Michelle Dela Cruz, G.R. No. 214500, June 28, 2017.

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Illegal recruitment is “committed by persons who, without authority from the government, give
the impression that they have the power to send workers abroad for employment purposes.”

Illegal recruitment may be undertaken by either non-license or license holders. Non-license

holders are liable by the simple act of engaging in recruitment and placement activities, while
license holders may also be held liable for committing the acts prohibited under Section 6 of RA
8042. People vs. Erlinda A. Sison @ “Margarita S. Aguilar”, G.R. No. 187160, August 9, 2017

The Supreme Court (SC) has held in several cases that an accused who represents to others that
he or she could send workers abroad for employment, even without the authority or license to
do so, commits illegal recruitment.

Under RA 8042, a non-licensee or non-holder of authority commits illegal recruitment for

overseas employment in two ways: (1) by 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; or (2) by undertaking
any of the acts enumerated under Section 6 of RA 8042.

In this case, Sison herself admits that she has no license or authority to undertake recruitment
and placement activities. The Court has held in several cases that an accused who represents to
others that he or she could send workers abroad for employment, even without the authority or
license to do so, commits illegal recruitment. It is the absence of the necessary license or
authority to recruit and deploy workers that renders the recruitment activity unlawful. To prove
illegal recruitment, it must be shown that “the accused gave the complainants the distinct
impression that she had the power or ability to deploy the complainants abroad in a manner that
they were convinced to part with their money for that end.” People vs. Erlinda A. Sison @
“Margarita S. Aguilar”, G.R. No. 187160, August 9, 2017

Elements of Illegal Recruitment Committed by a Syndicate

Illegal recruitment committed by a syndicate, [as in the present case,] has the following elements:

a) the offender does not have the valid license or authority required by law to engage in
recruitment and placement of workers;
b) the offender undertakes any of the “recruitment and placement” activities defined in
Article 13(b) of the Labor Code, or engages in any of the prohibited practices enumerated
under now Section 6 of RA 8042; and

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c) the illegal recruitment is “carried out by a group of three or more persons conspiring
and/or confederating with one another in carrying out any unlawful or illegal transaction,
enterprise or scheme.”

In the third element, 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.” People vs. Erlinda A. Sison @ “Margarita S. Aguilar”, G.R. No. 187160, August 9,
2017

Elements of Illegal Recruitment in Large Scale

The offense of illegal recruitment in large scale has the following elements:
1) the person charged undertook any recruitment activity as defined under Section 6 of RA
8042;
2) accused did not have the license or the authority to lawfully engage in the recruitment of
workers; and
3) accused committed the same against three or more persons individually or as a group.
People vs. Merceditas Matheus y Delos Reyes, G.R. No. 198795, June 7, 2017

It is settled that a person, for the same acts, may be convicted separately of illegal recruitment
under Republic Act (RA) No. 8042 or the Labor Code, and estafa under Article 315(2)(a) of the
Revised Penal Code (RPC).

The elements of estafa are: (1) the accused defrauded another by abuse of confidence or by
means of deceit; and (2) the offended party or a third party suffered damage or prejudice capable
of pecuniary estimation.

Here, the prosecution proved beyond reasonable doubt that accused-appellant deceived private
complainants into believing that she had the authority and capability to send them abroad for
employment, despite her not being licensed by the POEA to recruit workers for overseas
employment. Because of the assurances given by accused-appellant, the private complainants
parted with their hard-earned money for the payment of the agreed placement fee, for which
accused-appellant issued petty cash vouchers and used fictitious names evidencing her receipt
of the payments. People vs. Merceditas Matheus y Delos Reyes, G.R. No. 198795, June 7, 2017

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Unlike illegal recruitment as defined under the Labor Code which is limited to recruitment
activities undertaken by non-licensees or non-holders of authority, under Article 6 of Republic
Act (RA) No. 8042, illegal recruitment (for overseas employment) may be committed not only
by non-licensees or non-holders of authority but also by licensees or holders of authority.

Article 6 enumerates thirteen acts or practices [(a) to (m)] which constitute illegal recruitment,
whether committed by any person, whether a non-licensee, non-holder, licensee or holder of
authority. Except for the last two acts [(l) and (m)] on the list under Article 6 of RA 8042, the first
eleven acts or practices are also listed in Article 34 of the Labor Code under the heading
“Prohibited practices.”

Thus, under Article 34 of the Labor Code, it is unlawful for any individual, entity, licensee or holder
of authority to engage in any of the enumerated prohibited practices, but such acts or practices
do not constitute illegal recruitment when undertaken by a licensee or holder of authority.
However, under Article 38(A) of the Labor Code, when a non-licensee or non-holder of authority
undertakes such “prohibited practices,” he or she is liable for illegal recruitment. RA 8042
broadened the definition of illegal recruitment for overseas employment by including thirteen
acts or practices which now constitute as illegal recruitment, whether committed by a non-
licensee, non-holder, licensee or holder of authority. People vs. Alelie Tolentino, G.R. No.
208686, July 1, 2015

Under Section 6 of Republic Act (RA) No. 8042, illegal recruitment is defined as including any
person, whether a non-licensee, non-holder, licensee or holder of authority.

It is worthy to emphasize that under Section 6 of Republic Act No. 8042, illegal recruitment is
defined as including any person, whether a non-licensee, non-holder, licensee or holder of
authority. Thus, the contention of accused-appellant that she was a holder of a license to operate
as a recruiter during the alleged period when the crimes were committed does not matter
because she was still performing an act considered to be an illegal recruitment by failing to
reimburse the expenses incurred by the private complainants. Under Section 6(m) of R.A. No.
8042, failure to reimburse expenses incurred by the workers in connection with his
documentation and processing for purposes of deployment, in cases where the deployment does
not actually take place without the worker’s fault, is considered as performing illegal recruitment.
People vs. Delia Molina y Cabral, G.R. No. 207811, June 1, 2016

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Although Section 7 of Republic Act (RA) No. 8042 has been amended by Section 6 of RA No.
10022 which, accordingly, increased the penalty for the crime, the old law, i.e., RA No. 8042 —
which is more advantageous to the accused — still applies considering that the crime was
committed from 2004 to 2005 when the old law was still in effect.

In this case, the courts a quo correctly imposed the penalty of life imprisonment and fine of
P1,000,000.00. People vs. Erlinda Racho y Somera, G.R. No. 227505, October 2, 2017

Even the mere employee of a company or corporation engaged in illegal recruitment could be
held liable, along with the employer, as a principal in illegal recruitment once it was shown that
he had actively and consciously participated in illegal recruitment.

In this case, the accused-appellant’s denial of her participation in the illegal recruitment activities
of Bermudez and Langreo did not gain traction from her charging her co-accused with the sole
responsibility for the illegal recruitment of the complainants. Based on the testimonial narration
of the complainants regarding their recruitment, she was unqualifiedly depicted as having the
primary and instrumental role in recruiting them for overseas placement from the inception.
Also, her claim of having been only casually associated with GNB Marketing did not preclude her
criminal liability for the crimes charged and proved. Even the mere employee of a company or
corporation engaged in illegal recruitment could be held liable, along with the employer, as a
principal in illegal recruitment once it was shown that he had actively and consciously
participated in illegal recruitment. This is because recruitment and placement include any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, as well as
referrals, contract services, promising or advertising for employment, locally or abroad, whether
for profit or not. People vs. Marissa Bayker, G.R. No. 170192, February 10, 2016

Section 9 of Republic Act (RA) No. 8042 fixed an alternative venue from that provided in Section
15(a) of the Rules of Criminal Procedure, i.e., a criminal action arising from illegal recruitment
may also be filed where the offended party actually resides at the time of the commission of
the offense and that the court where the criminal action is first filed shall acquire jurisdiction
to the exclusion of other courts.

In this case, despite the clear provision of the law, the RTC of Manila declared that it has no
jurisdiction to try the cases as the illegal Recruitment and Estafa were not committed in its
territory but in Kidapawan City. [We] are, thus, one with the CA in finding that the RTC of Manila
committed grave abuse of discretion and in fact, a palpable error, in ordering the quashal of the
Informations. The express provision of the law is clear that the filing of criminal actions arising

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from illegal recruitment before the RTC of the province or city where the offended party actually
resides at the time of the commission of the offense is allowed. It goes without saying that the
dismissal of the case on a wrong ground, indeed, deprived the prosecution, as well as the
respondent as complainant, of their day in court. Eileen P. David vs. Glenda S. Marquez, G.R. No.
209859, June 5, 2017

The joint and several liability of the principal/employer, recruitment/placement agency, and
the corporate officers of the latter, for the money claims and damages of an overseas Filipino
worker is absolute and without qualification.

It is intended to give utmost protection to the overseas Filipino worker, who may not have the
resources to pursue her money claims and damages against the foreign principal/employer in
another country. The overseas Filipino worker is given the right to seek recourse against the only
link in the country to the foreign principal/employer, i.e., the recruitment/place-ment agency
and its corporate officers.

In this case, the liability of Saem Entertainment Company, Ltd. (SAENCO), as principal/employer,
and petitioner Princess Talent Center Production, Inc. (PTCPI), as recruitment/placement agency,
for the monetary awards in favor of respondent, an illegally dismissed employee, is joint and
several. Princess Talent Center Production, Inc. vs. Desiree T. Masagca, G.R. No. 191310, April
11, 2018

While the nature of death benefits under the Labor Code and the Philippine Overseas
Employment Administration-Standard Employment Contract (POEA-SEC) are similar, the death
benefits under the POEA-SEC are intended to be separate and distinct from, and in addition to,
whatever benefits the seafarer is entitled to under Philippine laws, including those benefits
which may be claimed from the State Insurance Fund.

Thus, the claim for death benefits under the POEA-SEC is the same species as the workmen’s
compensation claims under the Labor Code — both of which belong to a different realm from
that of Maritime Law. Therefore, the limited liability rule does not apply to petitioner’s liability
under the POEA-SEC. Phil-Nippon Kyoei, Corp. vs. Rosalia T. Gudelosao, et al., G.R. No. 181375,
July 13, 2016.

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The basis of the solidary liability of the principal with the local manning agent is found in the
second paragraph of Section 10 of the Migrant Workers and Overseas Filipino Act of 1995,
which, in part, provides: “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, is in turn, implemented by Section 1(e)(8), Rule 2, Part II of the Philippine Overseas
Employment Administration (POEA) Rules and Regulations Governing the Recruitment and
Employment of Seafarers, which requires the undertaking of the manning agency to “assume
joint and solidary liability with the employer for all claims and liabilities which may arise in
connection with the implementation of the employment contract [and Philippine Overseas
Employment Administration-Standard Employment Contract (POEA-SEC)].” Phil-Nippon Kyoei,
Corp. vs. Rosalia T. Gudelosao, et al., G.R. No. 181375, July 13, 2016.

The rule is that the release of one solidary debtor redounds to the benefit of the others.

In this case, considering that petitioner is solidarily liable with TEMMPC and TMCL, [we] hold that
the Release and Quitclaim executed by respondents in favor of TEMMPC and TMCL redounded
to petitioner’s benefit. Accordingly, the liabilities of petitioner under Section 20(A)(1) and (4)(c)
of the POEA-SEC to respondents are now deemed extinguished. [We] emphasize, however, that
this pronouncement does not foreclose the right of reimbursement of the solidary debtors who
paid (i.e., TEMMPC and TMCL) from petitioner as their co-debtor. Phil-Nippon Kyoei, Corp. vs.
Rosalia T. Gudelosao, et al., G.R. No. 181375, July 13, 2016

It is settled that when an action is instituted for the recovery of wages, or when employees are
forced to litigate and consequently incur expenses to protect their rights and interests, the
grant of attorney’s fees is legally justifiable.

Petitioner’s argument that she should not be held jointly and severally liable with Shorncliffe for
the payment of monetary awards to Bautista as she had no control over the manner of
implementation of the employment contract, she had no hand whatsoever in Bautista’s
dismissal, and that her agency was extinguished as soon as the employee was deployed to and
have worked in Shorncliffe’s construction project in Papua New Guinea, has no merit. In the first
place, such joint and solidary liability is required prior to the issuance of a license to petitioner to
operate a recruitment agency. Dionella A. Gopio vs. Salvador B. Bautista, G.R. No. 205953, June
6, 2018

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The overseas workers are assured that someone — at the very least, the foreign employer’s
local agent — may be made to answer for violations that the foreign employer may have
committed.

R.A. No. 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. In Sameer, [we] explained that the provision on joint and several liability
in R.A. No. 8042 is in line with the state’s policy of affording protection to labor and alleviating
workers’ plight. It assures overseas workers that their rights will not be frustrated by difficulties
in filing money claims against foreign employers. 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 — at
the very least, the foreign employer’s local agent — may be made to answer for violations that
the foreign employer may have committed. By providing that the liability of the foreign employer
may be “enforced to the full extent” against the local agent, the overseas worker is assured of
immediate and sufficient payment of what is due them. The local agency that is held to answer
for the overseas worker’s money claims, however, is not left without 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. Dionella A.
Gopio vs. Salvador B. Bautista, G.R. No. 205953, June 6, 2018

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