EMPLOYER-EMPLOYEE RELATIONSHIP A.

Elements of Relationship Labor Code: Article 97 (a), (b), (c), (e); 167 (f), (g); 212 (e) & (f) Cases: Villamaria v. CA, (GR No. 165881, April 19, 2006) ABS-CBN Broadcasting Corp. v. Nazareno (GR 164156, Sept. 26, 2006) in relation to Sonza v. ABS-CBN Broadcasting Corporation (June 10, 2004) Phil. Global Communications v. De Vera (GR 157214, June 7, 2005) Chavez v. NLRC (GR 146530, January 17, 2005) Angelina Francisco v. NLRC (GR 170087, August 31, 2006) B. Independent Contractors and Labor-Only Contractors

Independent Contractor - often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employee. Arrangement whereby the a principal agrees to put out wi Labor-Only-Contractor an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following are present:
The contractor or subcontractor does not have substantial capital or investment which relates to the job, work, service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or The contractor does not exercise the right to control the performance of the work of the contractual employee.

Labor Code: Art. 106-109 Department Order No. 18 - A, series of 2011 Cases: Philippine Airlines v. Ligan (GR 146408, February 29, 2008) San Miguel Corporation v. Aballa (GR 149011, June 28, 2005) Meralco Industrial Engineering Services v. NLRC (GR 145402, March 14, 2008) Manila Electric Company v. Benamira (GR 145271, July 14, 2005) Dole Phils. v. Esteva (GR No. 161115, November 30, 2006)
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For reference: Sonza v. ABS-CBN (GR 138051, June 10, 2004) Vinoya v. NLRC (GR 126586, February 2, 2000) Rosewood Processing, Inc. v. NLRC (290 SCRA 408) EMPLOYMENT POLICIES, RECRUITMENT AND PLACEMENT OF WORKERS, AND AGENCIES References Labor Code Arts. 12-39 , Local Employment, Overseas Employment; POEA Rules R.A. 8042 (1995) as amended by R.A. 10022 (2010); RA 9422 (amending RA 8042) a. Employment Policies Labor Code 3, 12 (a) (f); Constitution, Art. II, Sec. 9; Art. XIII, Sec. 3, par. 1; RA 8042, Secs. 2 (a) (b) in rel. to (g) (c), 4 & 5 (Migrant Workers and Overseas Filipinos Act of 1995 as amended) b. Employment Agencies b.1. Private Sector Agencies and Entities 1) Parties i. Worker Labor Code 13 (a); RA 8042, Sec. 3 (a)

a) "Migrant worker" refers to a person who is to be engaged, is engaged or has been engaged in a renumerated activity in a state of which he or she is not a legal resident to be used interchangeably with overseas Filipino worker. ii. iii. Private employment agency Labor Code 13 (c) (d); 12 (f); 14 (a) Private recruitment entity Labor Code 13 (e) (f); 12 (f); 14 (a)

2) Recruitment and Placement i. ii. Local employment Labor Code 13 (b) Overseas employment RA 8042 as amended, Sec. 6

Sec. 6. DEFINITIONS. - For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring workers and includes referring, contact services, promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-license 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,
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that such non-license 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 persons, whether a non-licensee, non-holder, licensee or holder of authority iii. Memorize: Labor Code Article 13 (b) definition of recruitment and placement (EVERYONE WILL RECITE)

Rectruitment and Placement : Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes, refferals, contract services, promising or advertising, for employment, locally or abroad, whether for profit or not: Provided, Thant any person or entity which in any manner, offers or promises for a fee, employment to two or more persons shall be deemed engaged in recruitment and placement. People v. Panis, 142 SCRA 664 (1986) Darvin v. Court of Appeal and People, G.R. No. 125044, July 13, 1998. People v. dela Piedra, G.R. No. 121777, January 24, 2001 People v. Ortiz v. Miyake, G.R. Nos. 115338-39, September 16, 1997 3) Allowed and Protected Entities i. ii. ii.1 Allowed Private Agencies and Entities Labor Code 16, 25, 18; 12 (f) Prohibited Business Agencies and Entities Labor Code 16, 18, 25, 26

Travel agencies Labor Code 26; Part II, Rule I, Sec. 2

Exceptions: Labor Code 18, 2nd sentence ii.2 Direct hiring 18 4) Government Techniques of Regulation Private Recruitment i. Licensing a. Citizenship Labor Code 27; 2002 POEA Rule, Part II, Rule I, Sec. 1 (a) Section 1. Qualifications. Only those who possess the following qualifications may be permitted to engage in the business of recruitment and placement of Filipino workers: a. Filipino citizens, partnerships or corporations at least seventy five percent (75%) of the authorized capital stock of which is owned and controlled by Filipino citizens;

b. Capitalization Labor Code 28; 2002 POEA RULES, Part II, Rule I, Sec. 1 (b) b. A minimum capitalization of Two Million Pesos (P2,000,000.00) in case of a single proprietorship or partnership and a minimum paid-up capital of Two Million Pesos (P2,000,000.00) in case of a corporation; Provided that those with existing licenses shall, within four years from effectivity hereof, increase their capitalization or paid up capital, as the case may be, to Two Million Pesos (P2,000,000.00) at the rate of Two Hundred Fifty Thousand Pesos (P250,000.00) every year. c. Validity of license 2002 POEA Rules, Part II, Rule II, Sec. 5, 6 Section 5. Provisional License. Applicants for new license shall be issued a provisional license which shall be valid for a limited period of one (1) year within which the applicant should be able to comply with its undertaking to deploy 100 workers to its new principal. The license of a complying agency shall be upgraded to a full license entitling them to another three years of operation. Non-complying agencies will be notified of the expiration of their license. Section 6. Validity of the License. Except in case of a provisional license, every license shall be valid for four (4) years from the date of issuance unless sooner cancelled, revoked or suspended for violation of applicable Philippine law, these rules and other pertinent issuances. Such license shall be valid only at the place/s stated therein and when used by the licensed person, partnership or corporation. d. Non-transferability Labor Code 29; 2002 POEA Rules, Part II, Rule II, Sec. 7, 8, 9 Section 7. Non-Transferability of License. No license shall be transferred, conveyed or assigned to any person, partnership or corporation. It shall not be used directly or indirectly by any person, partnership or corporation other than the one in whose favor it was issued. In case of death of the sole proprietor and to prevent disruption of operation to the prejudice of the interest of legitimate heirs, the license may be extended upon request of the heirs, to continue only for the purpose of winding up business operations. Section 8. Change of Ownership/Relationship of Single Proprietorship or Partnership. Transfer or change of ownership of a single proprietorship licensed to engage in overseas employment shall cause the automatic revocation of the license. A change in the relationship of the partners in a partnership duly licensed to engage in overseas employment which materially interrupts the course of the business or results
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in the actual dissolution of the partnership shall likewise cause the automatic revocation of the license. Section 9. Upgrading of Single Proprietorship or Partnerships. License holders which are single proprietorships or partnerships may, subject to the guidelines of the Administration, convert into corporation for purposes of upgrading or raising their capabilities to respond adequately to developments/changes in the international labor market and to enable them to better comply with their responsibilities arising from the recruitment and deployment of workers overseas. The approval of merger, consolidation or upgrading shall automatically revoke or cancel the licenses of the single proprietorships, partnerships or corporations so merged, consolidated or upgraded. e. Registration fees Labor Code 30; 2002 POEA Rules, Part II, Rule II, Sec. 4 Section 4. Payment of Fees and Posting of Bonds. Upon approval of the application, the applicant shall pay a license fee of P50,000.00. It shall submit an Escrow Agreement in the amount of P1,000,000.00, confirmation of escrow deposit with an accredited reputable bank and a surety bond of P100,000.00 from a bonding company acceptable to the Administration and accredited with the Insurance Commission. Agencies with existing licenses shall, within four years from effectivity hereof, increase their Escrow Deposit to One Million Pesos . The bonds and escrow shall answer for all valid and legal claims arising from violations of the conditions for the grant and use of the license, and/or accreditation and contracts of employment. The bonds and escrow shall likewise guarantee compliance with the provisions of the Code and its implementing rules and regulations relating to recruitment and placement, the Rules of the Administration and relevant issuances of the Department and all liabilities which the Administration may impose. The surety bonds shall include the condition that notice to the principal is notice to the surety and that any judgment against the principal in connection with matters falling under POEAs/NLRCs jurisdiction shall be binding and conclusive on the surety. The surety bonds shall cover the validity period of the license. f. Bonds Labor Code 31; 2002 POEA Rules, Part II, Rule II, Sec. 4 ii. Workers Fees/Filing fees/License fees (Placement fee) Labor Code 32; 2002 POEA Rules, Part II, Rule V, Sec. 3

Section 3. Action upon the application. Within fifteen (15) calendar days from receipt of an application with complete requirements including proof of payment of the filing fee of P10,000.00, the Administration shall evaluate the pertinent documents, inspect the offices and equipment and determine whether or not to grant or deny the application.
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Denial of an application will result in the forfeiture of the filing fee. iii. Reports/Employment Information Labor Code 33; 14 (d); 34 (h); RA 8042, Sec. 6 (h)

(h) To fail to submit reports on the status of employment, placement vacancies, remittances of foreign exchange earnings, separations from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment; iv. Illegal Recruitment: Simple/Syndicated Labor Code 34, 38 (a) (b); Secs. 6-12, RA 8042 a. When undertaken by non-licensees, non-holders b. Prohibited practices Note / Read: Art 38 (c) -- Declared Unconstitutional per Salazar v. Achacoso, 183 SCRA 145 (1990) relying on Const., Art III, Sec. 2 v. Enforcement Powers a. Regulatory power Labor Code 35, 36 b. Rule making power Labor Code 36 c. Visitorial power Labor Code 35, 37 5) Jurisdiction i. RTC over criminal action arising from illegal recruitment RA 8042, Sec. 9 Labor Arbiter over money claims RA 8042, Sec. 10.

ii.

Note / Read: A phrase thereof was declared unconstitutional by SC per Serrano v. Gallant Maritime Services, Inc. GR No. 167614; Mar. 24, 2009 Flourish Maritime Shipping v. Donato Almazor, GR No. 177948; Mar. 14, 2008