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WHEREAS, despite existing provisions of law and the continuing efforts to

eliminate them, illegal recruiters, have continued to proliferate and victimize
unwary workers; chanroblesv irtualawli bra ry

WHEREAS, illegal recruiters have defrauded and caused untold sufferings to

thousands of Filipino workers and their families; chan roble svirtualawl ibra ry

WHEREAS, experience shows that because of light penalties, illegal recruiters

have become more callous and bolder in their modus operandi and usually
carry out their activities as syndicates or in large scale; chanro blesv irt ualawli bra ry

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the

Philippines, by virtue of the powers vested in me by the Constitution, do hereby

Section 1. Articles 38 and 39 of Presidential Decree No. 442, as amended,

otherwise known as the Labor Code of the Philippines, is hereby further
amended to read as follows: cra law

"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 officers 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. chanrobles virtua lawlib rary

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 this first paragraph hereof. Illegal recruitment is deemed
committed in large scale if committed against three (3) or more persons
individually or as a group.

(c) The Minister of Labor and Employment or his duly authorized

representatives shall have the power to cause the arrest and detention of such
non-license or non-holder of authority if after investigation it is determined that
his activities constitute a danger to national security and public order or will
lead to further exploitation of job-seekers. The Minister shall order the search
of the office or premises and seizure of documents paraphernalia, properties
and other implements used in illegal recruitment activities and the closure of
companies, establishment and entities found to be engaged in the recruitment
of workers for overseas employment, without having been licensed or
authorized to do so.

"Art. 39. Penalties. — (a) The penalty of imprisonment and a fine of One
Hundred Thousand Pesos (P100,000) shall be imposed if illegal recruitment
constitutes economic sabotage as defined herein; cha nrob lesvi rtua lawli brary

(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 two years nor more 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;chan rob lesvi rtua lawlib rary

(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; chan roble svirtualawl ibra ry

(d) If the offender is a corporation, partnership, association or entity, the

penalty shall be imposed upon the officer or officers of the corporation,
partnership, association or entity responsible for violation; and if such officer is
an alien, he shall, in addition to the penalties herein prescribed be deported
without further proceedings; c han roblesv irt ualawli bra ry

(e) In every case, conviction shall cause and carry the automatic revocation
of the license or authority and all the permits and privileges granted to such
person or entity under this Title, and the forfeiture of the cash and surety
bonds in favor of the Overseas Employment Development Board or the National
Seamen Board, as the case may be, both of which are authorized to use the
same exclusively to promote their objectives.

Section 2. This Decree shall take effect immediately.

Done in the City of Manila, this 26th day of January, 1986.

What is Illegal Recruitment?*

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, nonholder, 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

(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.


A was approached for possible overseas deployment to Dubai by X, an interviewer of job applicants
for Alpha Personnel Services, Inc., an overseas recruitment agency. X required A to submit certain
documents (passport, NBI clearance, medical certificate) and to pay P25,000 as processing fee.
Upon payment of the said amount to the agency cashier, A was advised to wait for his visa. After five
months, A visited the office of Alpha Personnel Services, Inc. during which X told him that he could
no longer be deployed for employment abroad. A was informed by the Philippine Overseas
Employment Administration (POEA) that while Alpha Personnel Services, Inc. was a licensed
agency, X was not registered as its employee, contrary to POEA Rules and Regulations. Under
POEA Rules and Regulations, the obligation to register personnel with the POEA belongs to the
officers of a recruitment agency.

a. May X be held criminally liable for illegal recruitment? Explain. (2%)

b. May the officers having control, management or direction of Alpha Personnel Services, Inc.
be held criminally liable for illegal recruitment? Explain. (3%)

Recruitment & Placement; Travel Agency; Prohibition (2006) Wonder Travel and Tours Agency (WTTA) is
a well-known travel agency and an authorized sales agent of the Philippine Air Lines. Since majority of its
passengers are overseas workers, WTTA applied for a license for recruitment and placement activities. It
stated in its application that its purpose is not for profit but to help Filipinos find employment abroad.
Should the application be approved? (5%) ALTERNATIVE ANSWER: The application should be
disapproved, as it is prohibited by Article 26 of the Labor Code, to wit: "Article 26. Travel agencies and
sales agencies of airline companies are prohibited from engaging in the business of recruitment and
placement of workers for overseas employment whether for profit or not." Rule I, Part IIPOEA Rules and
Regulations Governing the Recruitment and Employment of Land-Based Workers (2002) disqualifies any
entity having common director or owner of travel agencies and sales agencies of airlines, including any
business entity from the recruitment and placement of Filipino workers overseas, whether they derive
profit or not. ALTERNATIVE ANSWER: No. Section 6 of RA No. 8042 considers the following act as illegal
recruitment: "(j) For an officer or agent of a recruitment agency to become an officer or member of the
Board of any corporation engaged in travel agency or to engage directly or indirectly in the management
of a travel agency." The law considers the operation of travel agencies and recruitment agencies as
incompatible activities.
Recruitment & Placement; Large Scale Illegal Recruitment (2005) Maryrose Ganda's application for the
renewal other license to recruit workers for overseas employment was still pending with the Philippine
Overseas Employment Administration (POEA). Nevertheless, she recruited Alma and her three sisters,
Ana, Joan, and Mavic, for employment as housemates in Saudi Arabia. Maryrose represented to the
sisters that she had a license to recruit workers for overseas employment. Maryrose also demanded and
received P30,000.00 from each of them for her services. However, Maryrose's application for the
renewal of her license was denied, and consequently failed to employ the four sisters in Saudi Arabia.
The sisters charged Maryrose with large scale illegal recruitment. Testifying in her defense, Maryrose
declared that she acted in good faith because she believed that her application for the renewal of her
license would be approved. Maryrose adduced in evidence the Affidavits of Desistance which the four
private complainants had executed after the prosecution rested its case. In the said affidavits, they
acknowledge receipt of the refund by Maryrose of the total amount of P120,000.00 and indicated that
they were no longer interested to pursue the case against Maryrose. Resolve the case with reasons. (5%)
ALTERNATIVE ANSWER: Illegal recruitment is defined by law as any recruitment activities undertaken by
non-licenses or non-holders of authority. (People v. Senoron, G.R. No. 119160, January 30,1997) And it is
large scale illegal recruitment when the offense is committed against 3 or more persons, individually or
as a group. (Article 38[b], Labor Code) In view of the above, Maryrose is guilty of large scale illegal
recruitment. Her defense of good faith and the Affidavit of Desistance as well as the refund given will
not save her because R.A. No. 8042 is a special law, and illegal recruitment is malum prohibitum. (People
v. Saulo, G.R. No. 125903, November 15, 2000) ALTERNATIVE ANSWER: With the execution of the
affidavit of desistance by the complainants and the refund made by Maryrose, the case against her for
large scale illegal recruitment will surely fail.

LABOR LAW -- 10%

Labor Standards
1.) This is issued by DOLE authorizing a person or entity to operate a private employment agency.
a. License
b. Document
c. Authority
d. Charter party
2.) The following may engage in the recruitment and placement of workers, locally and overseas,
a. Public employment offices
b. Private employment agencies
c. Shipping or manning agents
d. Local employment agencies
3.) Direct hiring of Filipino workers for overseas employment is not allowed. The following are not
covered by this rule, except:
a. Members of the diplomatic corps
b. International organizations
c. Multinational Corporations
d. Name hirees
4.) The accused X and Y represented themselves to complainants A and B to have the capacity to
send workers abroad, although they did not have any authority or license. It is by this representation
that they induced complainants to pay a placement fee. X and Y may also be liable for
a. Illegal recruitment by economic sabotage
b. Illegal recruitment in large scale
c. Syndicated Illegal recruitment
d. Estafa
5.) The Labor Code applies to:
a. Employees in a government corporation incorporated under the Corporation Code
b. International Agencies
c. Employees of government corporations created by special or original charter
d. Government employees
6.) Which of the following is the most essential element without which there is no employer-
employee relationship.
a. Hiring
b. Control
c. Firing
d. Payment of wages
7.) Who has jurisdication over all money claims of overseas filipino workers arising from employer-
employee relationship?
a. labor arbiters
c. regular courts
d. voluntary arbitrators
8.) A Filipino serviceman who is working in a US military installation in Pakistan is mandatorily
required by law to remit to his family or dependents in the Philippines ____ of his foreign exchange
a. 70 per cent
b. 50 per cent
c. 80 per cent
d. none
9.) Illegal recruitment involving economic sabotage prescribes in:
a. 10 years
b. 20 years
c. 5 years
d. imprescriptible
10.) Being the judge of the trial court, you found the accused Jonie guilty of simple illegal
recruitment. The proper penalty you would impose would be
a. life imprisonment
b. prision correctional
c. prision mayor
d. destierro
11.) Statement A - A company that exercises its prerogative to dismiss is not allowed to turn around
and deny employee-employer relationship.
Statement B - Alleging abandonment indicates employer-employee relationship.
a.) Both statements are true
b.) Both statements are false
c.) Only statement A is true
d.) Only statement B is true
12.) Statement A - It is the employer’s duty to inform the probationary employee reasonable work
Statement B -The employer may terminate the services of probationary employee without valid
cause as long as such termination is done within the six month trial period.
a) Both statements are true
b) Both statements are false
c) Only statement A is true
d) Only statement B is true
Answers: 1.) a 2.) d 3.) c 4.) d 5.) b 6.) b 7.) a 8.) d 9.) b 10.) c 11.) a 12.) c