Direct hiring rules won't work, lawyer explains why

In less than a month after its implementation last January 15, the new guidelines on direct hiring of Filipino workers has already created so much confusion, and that the policy would simply not work," a migrant group's lawyer said on Tuesday. “The Philippine Overseas Employment Administration’s Memorandum Circular No. 4 (POEA MC 4) will surely fail as it has no clear definition of coverage and some of its provisions are vague," said Atty. Henry Rojas, legal counsel of the Center for Migrant Advocacy (CMA). Rojas said that he based his prediction on the bulletin the Department of Labor and Employment (DOLE) and the POEA issued recently to clarify the issues hurled against the new hiring policy. He said that the bulletin has brought confusion, doubts and more questions instead of clarifying issues. DOLE-POEA claimed that the policy was based on Article 18 of the 1974 Labor Code, which states that no employer may hire a Filipino worker for overseas employment except through the POEA and entities authorized by the Secretary of Labor. It further claimed that the only intention of MC 4 was to protect overseas Filipinos workers (OFWs) directly hired by foreign employers. According to Rojas, the rationale of the law was that direct hiring affords no protection to OFWs – there is no joint and solitary liability between the recruitment agency and the employer, no POEA-approved contract containing the required minimum standards, and there was no bond posted by a recruitment agency. Thus, direct hiring had been banned under Article 18 of the 1974 Labor Code, said Rojas. Problem of coverage Rojas said that recently DOLE-POEA has introduced a number of exemptions as who may hire a Filipino worker for overseas employment. “Ironically, while MC 04 purports to enforce the ban on direct-hiring, it actually does the opposite by expanding the exceptions on those who are allowed to hire OFWs directly, thus opening the gates for direct hiring," Rojas said in an interview with GMANews.TV. “Who are exactly covered by MC 04, or who are allowed to hire workers directly and legally?" Rojas said. As mentioned in the DOLE-POEA bulletin, exempted from the ban are members of the diplomatic corps and international organizations, immediate members of royal family and family of heads of state/government. “These employers are not required to post repatriation and performance bonds under MC 4," Rojas said, adding that he has yet to see that legal basis of the exemption since the policy has not been amended yet. Rojas questioned the exemption from the hiring ban ministers, deputy ministers and other senior government officials of the host country. “What is the standard to determine who is a senior government official and who is not? Who will determine this?" he asked. Another set of employers who are not covered by the ban are those residing in countries where foreign placement agencies do not operate. “This category is too vague and can be subject to abuse. What countries exactly are being referred to in this category – MC 04 does not say," Rojas added. Filipino expatriates and residents with capacity to hire Filipino workers, employers who are hiring on a one time basis, employers who need workers immediately and have submitted an undertaking to tie-up with licensed Philippine agencies for its next recruitment are also exempted from the ban. Rojas said that all these exemptions could open the floodgates rather than enforce the ban on direct hiring. Problems with bond Rojas raised some problems that might arise from the bond requirement. Under MC 04, the prospective employer is supposed to secure a performance bond equivalent to three months salary ($3, 000) and a $5,000 repatriation bond, which according to the POEA explanation, must be secured by the foreign employer from a Philippine surety company accredited by the Insurance Commission. He said that a foreign employer might not even bother to comply with MC 04 bond requirement and would just opt to hire workers from other countries. “But the most basic question is how would a foreign employer secure a performance and repatriation bond from a local surety company if the employer has no local agent?" Rojas said. The POEA said that the foreign employer does not have to put up the entire amount of the bond, and that a foreign employer has to pay only the bond premiums. “Again, the policy appears to be short in substance. What local bonding company will be willing to issue a performance and repatriation bond to a foreign employer without a security or collateral?" Rojas said. He added that, “in case an OFW claims on the performance and repatriation bond, how will the local surety collect reimbursement from the foreign employer? In local legal bonds, the practice is that in addition to the payment of the bond premium, the surety company asks for additional collateral in order to secure its bond exposure." According to him, a surety company may be willing to take the risk of loss provided it is covered by the volume of its business. “Will there be local bonding companies that will provide the bonds for direct hires?" he asked. - Luis Gorgonio, GMANews.TV