POEA grants exemptions to direct-hiring policy

The Labor department will revise the guidelines on direct hiring by foreign employers to exempt major labor exporting countries Canada, Italy and Hong Kong from the mandatory $5,000 repatriation bond and up to $3,000 performance bond. This was the decision arrived at in a meeting of the Philippine Overseas Employment Administration (POEA) governing board on Friday, which was called to address mounting calls for the complete scrapping of Memorandum Circular No. 4. “MC 04 stays but we are looking at exemptions because we received reports from POLOs in Italy and Hong Kong that this protection is already in place," Labor Secretary Arturo Brion said as he emerged from the meeting. At the same time, Brion clarified that the repatriation and performance bonds would not be paid in cash, but in bonds. “So, ang sinasabi natin dito walang cash na ilalabas kundi bond," he said. In this regard, the POEA board saw the need to have a deeper review of the capability of insurance companies in the country to handle the bond payments. The Labor chief asserted that the guidelines were intended to protect Filipino workers recruited directly for overseas employment. The policy was meant to reinforce the provision of the Philippine Labor Code that prohibits 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, he explained. Calls are mounting from recruitment agencies and migrant workers for the scrapping of the direct hiring policy that the POEA board approved on Dec. 18, 2007 and took effect on January 15. OFWs view the guidelines as “anti-Filipino" in general and “anti-OFW" in particular, saying it would discourage foreign employers from hiring Filipinos because of the $5,000 repatriation bond plus $3,000 performance bond in hiring a Filipino worker. The performance bond will guarantee payment of the OFW’s salary for the duration of his or her job abroad. The repatriation bond will assure that in the event the OFW dies, he or she can be sent back to his or her country. “Contrary to what the critics say, employers will have to pay only the premium of the US$5,000 repatriation bond and performance bond equivalent to three months salary of the worker," Brion earlier said in justifying the issuance of MC 4. “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," he explained. “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. The new guidelines also require the foreign employer to provide medical insurance to the worker at an amount equivalent to those provided to nationals of the host country. Under the existing POEA rules, the general procedure for the recruitment and deployment of OFWs 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. Brion said legislation may be needed to amend the Labor Code if its provisions no longer serve their purpose. "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 asserted. “In direct hiring, recruitment agencies are not involved and compliance to the contract is therefore dependent on the capability of the foreign employer," he said. However, Brion said the DOLE is open to exemptions from the total implementation of the POEA guidelines on a per country, employer or workers classification based on the request of the Philippine Overseas Labor Offices (POLOs). “The POLO should be able to justify such exemptions based on the existing rules and regulations in the host country providing for the protection of the workers in the area of repatriation and repatriation bonds. The POLO should likewise be able to inform DOLE of the mechanisms on the effective implementation or enforcement of such laws and regulations," he said. POEA records show that in 2007, a total of 26,753 OFWs in the household and other services were directly hired by foreign employers. The biggest employer of directly hired household service workers was Italy at 5,564 followed by Canada and Spain, while the Middle East hired the most number of non-household service OFWs on direct hiring basis. – GMANews.TV