Under Philippine law, generally, direct hiring is not allowed (Article 18 of the Labor Code – Ban on direct-hiring). There are two modes of hiring Filipinos for overseas placement: 1. Through POEA; and, 2. Through Private Recruitment Agencies duly accredited by the POEA. An exception was under name-hire as may be allowed or regulated by the Secretary of Labor.
With this Memorandum Circular, the POEA has effectively plugged an operative loophole in the rules on overseas placement. Name-hire (or direct-hiring) has been known to be used by non-licensees (those “recruiters” with no license from POEA) to conduct recruitment activities.
Likewise, this POEA MC will provide protection to Filipino workers hired through name-hire with the provisions on pre-qualification with the Philipine Overseas Labor Office (POLO) and the POEA. There is also a bond requirement on the employer. Such pre-qualification (which is akin to verification or the employer and the job order) puts into POEA regulatory mechanism this loophole in overseas placement rules.
The POEA circular was issued on December 18, 2007.
Competent legal assistance is needed to ensure compliance with this rule on direct-hiring as well as other Philippine overseas placement rules and regulations.
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