Villar warns on threat to labor export

SENATE President Manuel Villar Jr. yesterday warned that the stringent rules imposed on the direct-hiring of Filipino workers, such as requiring prospective employers to place a bond amounting to more than $5,000 will result in the non-competitiveness of Filipino labor.

He wants the Senate to conduct an inquiry into the memorandum restricting the direct-hiring of Filipino workers which was implemented in the wake of pronouncements by various governments allowing Filipino workers to fill up their manpower needs.

Villar filed Resolution No. 291 urging the Senate committee on labor to look into the effect of this new policy on direct-hiring issued by the Philippine Overseas Employment Administration (POEA) on the competitiveness of Filipino labor especially at this time when Spain, Italy and Canada have opened up their labor market to the Philippines.

Memorandum Circular No. 4, which took effect last Jan.15, issued by POEA head Rosalinda Baldoz imposed stricter documentation and processing requirements including an approval from the Secretary of the Department of Labor and Employment for foreign employers who want to hire Filipino workers directly.

Villar said the requirements of a performance bond amounting to the workers’ three-month salary, a $5,000 repatriation bond and medical insurance, “could discourage foreign employers from hiring Filipinos.”
By: Bernadette E. Tamayo - Journal online

DoLE clarifies new direct hiring policy

By: Lee Ann P. Ducusin - People's Journal
THE Department of Labor and Employment yesterday clarified certain issues regarding the implementation of the new policy of the Philippine Overseas Employment Administration on the direct hiring of overseas Filipino workers.

Labor Secretary Arturo Brion said some people who are against the policy are trying to sow confusion among OFW’s and foreign employers by giving false information about its implementing guidelines.

“There are some people who are spreading false implementation about the new policy’s implementing guidelines,” he said.

Brion clarified that contrary to what the critics say, employers will have to pay only the premium of the U.S.$5,000 repatriation bond and performance bond equivalent to three months salary of the worker.

He added the repatriation bond shall guarantee the actual cost of repatriation of remains of directly hired OFW following death from any cause, and actual cost incurred for repatriation from other causes such as violation or non-compliance with the contract among others. The performance bond shall guarantee compliance of the contract for its entire duration.

The bond shall be secured from any Philippine bonding company accredited by the Supreme Court. Premiums for the bonds shall be paid by the employer.

The labor chief added a foreign employer is also required to provide medical insurance to the worker at an amount equivalent to those provided to nationals of the host country.

“The adoption of these new requirements is aimed at strengthening the protection mechanisms for the OFW’s,” he said.

Brion said the new guidelines were issued to reinforce the provision of the Philippine Labor Code that prohibits the direct hiring of Filipino workers except for selected employers such as diplomats, heads of international organizations and other employers as may be approved by the Secretary of Labor and Employment.

“If this law is no longer a wise law, then the appropriate step is to secure an amendatory legislation. In the meanwhile, we have to apply the current law, adjusted by our rules to the extent allowable,” he explained.

Under the existing POEA rules, the general procedure for the recruitment and deployment of OFW’s is through POEA-licensed recruitment agencies. These agency-hired workers are protected under existing regulations such as bonding requirements for licensed recruitment agencies, which guarantees compliance to the terms of the employment contract, particularly relating to money claims of the workers.

In direct hiring, recruitment agencies are not involved and compliance to the contract is therefore dependent on the capability of the foreign employer.

However, the labor secretary said the DoLE is open to exemptions from the total implementation of the POEA guidelines (MC 4, S2007) on a per country, employer or workers classification based on the request of the Philippine Overseas Labor Offices.