Basic Concepts on Illegal Recruitment

From the Labor Code [PD 442] and Migrant Workers’ Act [RA 8042 as amended by RA 10022]
Summarized by: Reginald Matt Santiago, II-Manresa 2018-2019 | Ateneo de Davao College of Law

Recruitment and Placement

Recruitment and placement is defined under Article 13(b) of the Labor Code as the act undertaken by any person
in relation to employment as referring to any of the eleven acts enumerated locally or abroad.
1. Canvassing 7. Procuring workers
2. Enlisting 8. Referrals
3. Contracting 9. Contract services
4. Transporting 10. Promising, and
5. Utilizing 11. Advertising employment
6. Hiring [CECTU-HPR-CPA]

Illegal Recruitment, Concept

Illegal recruitment defined under Article 38 of the Labor Code and broadened by RA 8042 as amended by RA 10022
in overseas employment and by Department Order 141-14 for local employment. It is important to understand that the
concept of illegal recruitment must be understood in the following concepts:

1. As to the offenders, illegal recruitment can be committed by either:

a. Non-licensee or non-holder of authority;
b. Licensed or holder of authority to conduct recruitment and placement

2. As to the offenses or prohibited acts, illegal recruitment may be committed involving

a. Local employment
b. Overseas employment

3. As to the kinds of illegal recruitment, it can be committed either by

a. Simple Illegal Recruitment
b. Illegal Recruitment involving Economic Sabotage which can either be
i. Large Scale Illegal Recruitment, or
ii. Illegal Recruitment by a Syndicate

[1] As to the Offenders

There are basically two kinds of offenders involving illegal recruitment: (a) those who are non-licensee or non-authorized
agencies or recruiters, or (b) those who may be licensed or authorized but committed certain acts as clarified below:

Non-licensee or Non-authorized Licensed or Authorized

1. Performed any of the acts enumerated 1. Performed any of the prohibited
under Article 13(b) of the Labor Code. acts under Article 34 of the Labor
Code as broadened by RA 8042 as
2. Performed any of the prohibited acts amended by RA 10022.
under Article 34 of the Labor Code as
broadened by RA 8042 as amended by
RA 10022.

In short, there can be Illegal Recruitment by a Non-Licensed or Non-Authorized Recruiter when any of the acts
under Article 13(b) are performed by a non-licensee or non-authorized recruiter which if it was done by a licensed or
authorized one, is considered lawful. However, as to violations of the Prohibited Acts under Article 34 as well as expanded
by RA 8042 and RA 10022 in application to overseas employment of migrant workers, the law does not make any distinction
as to the violator for it can apply to (1) non-licensee; (2) non-holder of authority; (3) licensed; (4) holder of authority. Note
that as to the broadened application to the violators this was clarified in RA 8042 as amended by RA 10022 to be applied to
overseas employment. Initially, there was a question as to the application of the broadened scope of violators to local
recruitment and placement activities, but this was addressed by DO 141-14 which categorically provided that such acts
“shall be unlawful when committed by any person, whether or not holder of a license or authority.”
 Basic Concepts on Illegal Recruitment | Reginald Matt Santiago 2

[2] Offenses or Prohibited Acts Involved

Note that the there are three laws that covers illegal recruitment, while initially Article 13(b), in relation to Article
34 and Article 38 of the Labor Code enumerates the eleven acts that covers illegal recruitment. It is important to note that
for overseas employment, RA 8042 as amended by RA 10022 further broadened the scope of offenses in addition to some
of those enumerated under Article 34 of the Labor Code.

Note that for local employment the applicable provision is Article 34 of the Labor Code except three acts covered
under (h), (j), (k) which is applicable to overseas employment which was carried over to RA 8042 as amended by RA 10022.
For overseas employment, RA 8042 as amended by RA 10022 enumerates the acts considered as illegal recruitment which
basically reflects Article 34 of the Labor Code but adds certain acts in the enumeration:

NOTE: In both cases as provided in Article 38(a) of the Labor Code whether local or overseas any act of recruitment
placement done by a non-licensee or non-holder of authority is considered illegal recruitment.

[2][a] Illegal Recruitment in Local Employment

[a] To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowance fees
prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him
as a loan or advance [Overcharging];

[b] To furnish or publish any false notice of information or document in relation to the recruitment or employment
[False Notice].

[c] To give any false notice, testimony, information or document, or commit any act of misrepresentation for the
purpose of securing a license or authority under this code [Misrepresentation to Acquire License];

[d] To induce or to attempt to induce a worker already employed to quit his employment in order to offer him to
another, unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment
[Induce to Quit];

[e] To influence or to attempt to influence any person or entity not to employ any worker who has not applied for
employment through his agency [Induce Not to Employ];

[f] To engage in the recruitment or placement of worker in jobs harmful to public health or morality or to the dignity
of the Republic of the Philippines [Recruitment to Harmful Jobs];

[g] To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives
[Obstruct Inspection]; and

[i] To substitute or alter employment contracts approved and verified by the Department of Labor from the time of
actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of
the Secretary of Labor [Contract Substitution].

[2][b] Illegal Recruitment in Overseas Employment

NOTE: Acts [a] to [k] are sourced from Article 34 of the Labor Code as reflected in Section 6 of RA 8042, with some
modifications and amendments and included acts [l] to [n]. In 2010, when RA 10022 came in to effect, it added seven more
prohibited acts denominated (1) to (7) as enumerated below:

[a] is similar to [a] [Overcharging];

[b] is similar to [b] [False Notice];

[c] To give any false notice, testimony, information or document to 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 a non-existent work, work different from the actual overseas work, or work
with a different employer, whether register or not with the POEA [Misrepresentation to Acquire License and Misrepresentation in
Documentation];

[d] is similar to [d] [Induce to Quit];

 Basic Concepts on Illegal Recruitment | Reginald Matt Santiago 3

[e] is similar to [e] [Induce Not to Employ];

[f] is similar to [f] [Recruitment to Harmful Jobs];

[g] is similar to [g] [Obstruct Inspection];

[h] To fail to submit reports on the status of employment, placement, vacancies, remittances of foreign exchange earnings, separation
from jobs, departures and such other matters or information as may be required by the Secretary of Labor (taken from [h] of Article 34 of
the Labor Code) [Non-Submission of Reports];

[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 periods of expiration of the same without the
approval of the Department of Labor and Employment [Contract Substitution];

[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 (taken from [j] under Article 34 of the Labor
Code; note that this is prohibited under Article 26 of the Labor Code only for overseas) [Involvement in Travel Agencies];

[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 (taken from [k] under Article
34 of the Labor Code) [Withholding of Documents];

[l] Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment
[Failure to Deploy];

[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 [Failure to Reimburse]; and

[n] To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency [Non-Filipino Manager].

In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit the following
prohibited acts, as provided for under RA 10022:

(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 [Excessive Interest];

(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 [Specifying a Loan Entity];

(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 [Non-Renegotiation of a Loan];

(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 [Specifying a Medical Entity];

(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 for recommendatory
trainings mandated by principals/shipowners where the latter shoulder the cost of such trainings [Specifying a Training Facility];

(6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending
workers' applications [Violation of Suspension]; 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 [Collection of Insurance Premium].

NOTE: Note that the requirement of authority and license stems from Article 18 of the Labor Code on ban on direct hiring
where no employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized
by the DOLE, this must be read in relation to Article 25 of the Labor Code allowing private entities to engage in recruitment
and placement subject to the regulations of the Department of Labor and Employment.
 Basic Concepts on Illegal Recruitment | Reginald Matt Santiago 4

[3] Kinds of Illegal Recruitment

[3][a] Simple Illegal Recruitment

The elements of simple illegal recruitment are:
(1) That the offender has no valid license, or authority required by law to enable him to lawfully engage in the
recruitment and placement or workers;
(2) That the offender undertakes any activity within the meaning of recruitment and placement defined under
Article 13(b) or any prohibited practices enumerated under the law irrespective of whether the offender is non-
licensee, non-holder, licensee or holder of authority; and
(3) The number of recruiters and/or recruitees should not be more than two (2) persons.

[3][b] Illegal Recruitment Involving Economic Sabotage

Note that the first two elements under Simple Illegal Recruitment apply to illegal recruitment involving sabotage,
the main difference is the number of individuals involved.

[3][b][1] Illegal Recruitment by a Syndicate

If it is a carried out by a group of three or more persons conspiring or confederating with one another, and it does
not require that they should recruit more than one, recruitment of one person is enough to qualify the illegal recruitment
act as to be committed by a syndicate. Failure to prove that the recruiters were three or more or failure to prove conspiracy
among them would result to the offense being merely a simple illegal recruitment, which has a lower penalty.

[3][b][2] Large Scale Illegal Recruitment

If it is carried out against three or more persons individually or as a group, it shall then be considered as a large scale
illegal recruitment. This may be carried out by one person as long as there should be at least 3 victims of such illegal
recruitment. Failure to prove the number of victims is fatal or else it be considered simple illegal recruitment.

Illegal Recruitment by a Syndicate Large Scale Illegal Recruitment

Committed by three or more recruiters in
conspiracy or in confederation with one another
Cannot be committed by only one recruiter
Can be committed against only one recruitee
Conspiracy among the three is required
Committed against three or more recruitees
individually or as a group
Can be committed by only one recruiter
Cannot be committed against only one
recruitee
Conspiracy is not necessary

NOTE: Both applies to illegal recruitment involved in local employment and overseas employment although there is a
difference as to the penalties involved.

Penalties Involved

Illegal Recruitment in Illegal Recruitment in

Local Employment
(Article 39 of the Labor Code)
As to Simple Illegal Recruitment
If licensed or holder of authority:
• Imprisonment of not less than two (2)
years nor more than five (5) years; or
• Fine not less than P10,000 nor more
than P50,000, or
• Both at the discretion of the court.
If neither licensee or holder of authority
• Imprisonment of not less than four (4)
years nor more than eight (8) years; or
• Fine not less than P20,000 nor more
than P100,000; or
• Both at the discretion of the court.
Overseas Employment
(RA 8042 as am. RA 10022)
Any person guilty of illegal recruitment:
• Imprisonment of not less than
twelve (12) years and one (1) day
but not more than twenty (20)
years; and
• Fine of not less than P1M nor more
than P2M
If non-licensee or non-holder; or illegally
recruited a person less than 18 years old:
• Maximum penalty shall be
imposed.
 Basic Concepts on Illegal Recruitment | Reginald Matt Santiago 5

As to Illegal Recruitment Involving Economic Sabotage

Life imprisonment and a fine of not less than Life imprisonment and a fine of not less
One hundred thousand pesos (P100,000) shall than P2M nor more than P5M shall be
be imposed [39(a)]. imposed.

If non-licensee or non-holder; or illegally

recruited a person less than 18 years old:
• Maximum penalty shall be
imposed.
Any of the Prohibited Acts
No provision as to such. Imprisonment of not less than 6 years and 1
day but not more than 12 years and

Fine of not less than P500K nor more than

P1M.
Automatic Revocation of the License or Registration
In every case, conviction shall cause and carry In every case, conviction shall cause and
the automatic revocation of the license or carry the automatic revocation of the license
authority and all the permits and privileges or registration of the recruitment/manning
granted to such person as well as the forfeiture agency, lending institutions, training school
of bonds if any. or medical clinic.

Illegal Recruitment and Estafa

Note that the filing, conviction and acquittal in a case of illegal recruitment is not a bar to the filing, conviction
and acquittal in a case for estafa. Section 6 of RA 8042 as amended by RA 10022 explicitly provides that the filing of an
offense punishable under the cited laws shall be without prejudice to the filing of cases punishable under other existing
laws, rules or regulations. Estafa and illegal recruitment are two different and distinct crimes.

Illegal Recruitment Estafa

Malum prohibitum; criminal intent is not
necessary for conviction, fact alone is sufficient
for conviction
Elements are:
(1) Absence of license or authority
(2) Committed acts without license or
authority or committed any of the
prohibited acts under the law whether
or not with license or authority
(3) Can be simple (if less than three
recruiters or recruitees); or involving
economic sabotage.
Mala in se; criminal intent is necessary and
imperative.
Elements are:
(1) Accused defrauded by means of
abuse of confidence or by deceit
(2) The offended party or a third party
suffered damage or prejudice
capable of pecuniary estimation.

NOTE: This means it can be filed simultaneously or separately without resulting to double jeopardy. The same evidence to
prove illegal recruitment may be used to prove estafa.

Solidary Liability of the Recruitment Agency and Foreign Employer

The joint and several nature of the liability of the principal (employer) and the recruitment and placement agency
applies to any and all monetary claims arising out of the implementation of the employment contract involving Filipino
workers for overseas deployment.

Pre-qualification requirement. – In application for license to operate, there must be a duly notarized undertaking
stating that the applicant shall assume joint and solidary liability with the employer for all claims and liabilities which may
arises in connection with the implementation of the contract, including but not limited to, unpaid wages, death, and
disability compensation and repatriation.

Note that this joint and several obligation must be incorporated in the employment contract and it shall be a condition
precedent for its approval.
 Basic Concepts on Illegal Recruitment | Reginald Matt Santiago 6

Liability in case of juridical persons. – 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 or corporation over claims arising from employer-employee relationship.

Continuing liability. – The joint and several liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution, amendment, modification made locally or in a foreign
country of the said contract.

NOTE: Under RA 10022 to RA 8042, every OFW should now be compulsorily covered by insurance to answer, among
others, his/her monetary claims. This compulsory coverage, however, should not affect the joint and several liability of the
foreign employer and the recruitment/manning agency as provided in the law.

Venue for Actions for Illegal Recruitment (Section 9, RA 8042)

Section 9 of RA 8042 provides that a criminal action arising from illegal recruitment as defined herein shall be filed
with the Regional Trial Court of the province or city where:
1. The offense was committed, or
2. The offended party actually resides at the same time of the commission of the offense.

Provided, that the court where the criminal action is first filed shall acquire jurisdiction to the exclusion of the other courts.

NOTE: While as to money claims it shall be filed with the Labor Arbiters of the NLRC who original and exclusive jurisdiction
shall have to hear and decide. While as to issues arising from insurance coverage, it shall be with the Insurance Commission.

Prescriptive Period (Section 12, RA 8042)

Illegal recruitment cases under this Act shall prescribe in five (5) years: Provided, however, That illegal recruitment
cases involving economic sabotage as defined herein shall prescribe in twenty (20) years.

References:

Chan, J. G. (2017). Bar Reviewer on Labor

Law: Based on the Latest Supreme Court Prescribed
Syllabus for Labo Law. ChanRobles Publishing
Company: Ortigas Center, Pasig City.

Azucena, C.A. (2018). Everyone’s Labor

Code: Essential Textbook and Updated Reviewer.
Rex Printing Company, Incorporated: Sta. Mesa,
Quezon City.