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Many employers who want to hire workers directly from
the Philippines are up in arms against a memorandum circular of the
Philippine Overseas Employment Administration (POEA) requiring them
to post performance and repatriation bonds of $3,000 and $5,000,
respectively.
They lash out at the POEA for
making hiring of Filipino workers difficult and overburdening them
with the money guarantees. They don’t understand the background
and rationale of the direct hiring system.
There are three systems adopted
by the Department of Labor and Employment (DOLE) in hiring Filipino
workers by foreign employers. These are through (1) licensed
recruitment agencies, (2) a government-to-government arrangement
between the DOLE and a labor-importing country, and (3) the direct
hiring system.
The main objective of the three
systems is to guarantee the protection and well-being of overseas
Filipino workers (OFWs).
Thus, recruitment firms are
required to put up a substantial cash bond (as much as P2 million),
which is held in escrow by the POEA, to answer for any contingency
arising from the failed employment of a Filipino worker. A
recruitment agency is held liable for nonpayment or underpayment of
a worker’s salary by an employer.
A recruiting firm is also
answerable for violation by the employer of the employment contract
duly processed by the POEA or for the worker’s repatriation
resulting from the maltreatment or abuse by the employer.
The company is administratively
liable for any infringement of POEA rules and regulations.
Workers hired under a
government-to-government arrangement are also well-protected by the
labor guarantees written into the agreement.
The POEA has a standing agreement
with South Korea for the employment of Filipino workers in that
country under the so-called Employment Permit System (EPS). It makes
the South Korean government answerable for any violation by
employers of its agreement’s provisions.
The POEA has another labor
agreement with the United Arab Emirates. In the event of a violation
by an employer of its provisions, the UAE government is committed to
impose the appropriate sanctions against the employer.
The Japan-Philippine Economic
Partnership Agreement, which has a labor component, ensures the
protection of Filipino workers employed in Japan once the accord is
ratified by the Senate.
But under the direct hiring
system, the POEA has no control over an employer for any violation
of an employment contract. In case there is a need to repatriate a
worker, the government regulatory agency cannot compel the employer
to shoulder the cost.
Memorandum Circular No. 4,
approved by the POEA governing board late last year, prescribes the
guidelines for direct hiring. It imposes the $3,000 performance bond
to guarantee compliance by an employer with the provisions of the
job contract.
The $5,000 repatriation bond
covers the actual cost of repatriating a worker’s remains and
subsequent burial following his or her death from any cause. It will
also be used for repatriating a worker resulting from the violation
of the employment contract or from the violation or non-compliance
with the labor laws of the host country or of the Philippines
“except when the violation is attributed to the worker or when he
resigns to return to the Philippines.”
The circular also prescribes the
procedures for the direct hiring of Filipino workers. It seeks the
screening of an employer, taking into account his ability to pay his
worker’s salary, his integrity and employment record, by a
Philippine overseas labor office or the Philippine Embassy having
jurisdiction over the jobsite.
The imposition of the
repatriation and performance bonds applies only to the direct hiring
system.
If an employer cannot afford to
put up the required money guarantees, he or she is free to go to a
licensed recruitment firm. It is the recruiting firm that
facilitates the hiring under the full guarantee of its cash bond
held in escrow by the POEA.
Some workers have protested the
POEA circular, not realizing that the required repatriation and
performance bonds are for their own protection against employers’
abuse and exploitation.
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